Bostoncoin update Jan-Feb 2023

Are top Billionaires lying to you?

Billionaire investor Warren Buffett says he hates crypto. Buffett called crypto “rat poison” and his business partner Charlie Munger likened crypto to a venereal disease. You can either take those comments at face value and assume that the company founded by these nonagenarian investors would never invest in crypto. Or you can dig a little deeper and see if they are playing the old “switcheroo” game with the world.

If you wanted to buy a house, car, business or something else very cheaply, you may try to tell the seller that it was a worthless load of rubbish. If they were to agree with you, even a little, then you could haggle the price down. King Solomon stated almost 4000 years ago: “The buyer haggles over the price, saying, ‘It’s worthless,’ then brags about getting a bargain!” (Proverbs 20:14).

OK, so the talking heads of Berkshire Hathaway are saying that crypto is poison and a disease, but what is the BRK company doing with its money?

· One of Berkshire/Buffett’s biggest holdings, Amazon, is now involved in testing a “digital euro” in Europe, as well as launching an NFT range

· Another Berkshire holding, American Express, launched its first crypto credit card

· Berkshire also holds a lot of stock in Visa. The “Crypto Visa” made $2.5 billion last year in just three months

· Berkshire invested $500 million into Nubank, a self-professed “digital bank,” that is launching its own cryptocurrency

In other news, other billion-dollar companies are making moves into crypto, like

• • Fidelity, making crypto available to 40 million retirement accounts

• • Goldman Sachs purchasing several million in crypto at bargain prices

• • JP Morgan was granted copyright for the JP Morgan digital wallet

• • Adobe, Adidas, MasterCard, Meta, Stripe, Reddit, META (Facebook), Starbucks, the NFL, and Disney are all launching NFTs on the Polygon network. Rather than just being a jpg or “virtual art”, these will be representations of value or a discount with the respective companies

People can say many things, but their actions may not line up. In crypto circles, we say “don’t trust, VERIFY”. This means that someone can show you a bank transfer receipt, but it may be a false or altered document. You could be waiting three days for the alleged transfer to come in and it never does. You can verify the payment if someone pays you in crypto, as the blockchain settlement is in your wallet almost instantaneously; even outside bank hours or on public holidays.

If a man says, “trust me”, ask him to show you his last 20 bank or credit card transactions. Donations to a church or charity will demonstrate more integrity than payments to his local bookie (or even paying off a pornstar, right Donald?)

Next time you hear someone saying they hate crypto, or anything else, dig a little deeper to find out if their actions line up with their words. It seems that Buffett and Munger may be spreading a false narrative, to benefit their own investing, and they would not be the first billionaires to throw up a smokescreen. Stay alert, and see where the billionaires are really putting their cash.

STOP PRESS: Bankrupt crypto lender may yet come back from the dead. Celsius went broke in 2022, leaving millions of investors without access to their crypto. New filings indicate that the company may seek to list on the US stock exchange to raise funds to pay off its liabilities. We can only hope.

Those who say “Bitcoin is dead” had better buy some

Once upon a time, Bitcoin rose up and then crashed. Media pundits declared “Bitcoin is dead”. A short time later it rose over 53 000%.

After a massive run, Bitcoin prices plummeted. Many said, “Bitcoin is dead”. Shortly thereafter, BTC prices rose 11 200%.

In 2018, after another crash, many armchair experts said, “Bitcoin is dead”. It then rose 2000%.

In 2022, after the collapse of FTX and several other crypto companies, the media declared, “Bitcoin is dead.” And yet it is rising again, up over 35% since the start of 2023.

You would think that the naysayers would have caught on by now. When you see Visa, Mastercard and Amex getting onboard, you know that blockchain and crypto are the future. Satoshi is dead. Long live Bitcoin.

Contrarian investing

Put simply, contrarian investing is “do the opposite of what most people are doing”. If everyone is selling, you buy and if everyone is buying, you sell. This can work a lot of the time, but not all the time. Contrarian investing will often see you buying low and selling high, but the fundamentals also need to be examined.

Consider that sometimes everyone is buying because it is the correct move. Selling Bitcoin when it moved from $1000 to $2000 in January 2017 would have seen you double your money, but then you would have missed out as prices kept going up to $19 000 by December 2017.

Buying when stock prices of Enron, WorldCom, Theranos halved, or even buying when property in Detroit went down by half, would have seen you making even bigger losses as they continued to drop.

The fundamentals must be studied to see if the ‘half-price special’ really is a bargain, or whether the ‘double your dollars’ is really a good time to sell.

Our own investment views at BostonTrading.co were contrarian in September 2019, when most economists were predicting a great 2020. We issued several warnings about an upcoming market crash, disagreeing with the official narrative, and we were proven correct a few months later when the pandemic occurred.

One month ago, in our previous newsletter, we were contrarian again. We suggested that 2023 would be great for crypto, and so far, average prices are up 20-40% in less than thirty days.

This apparent prescience was not just us subverting the dominant paradigm: we used fundamentals to cut through the noise of talking heads, TikTok, YouTube and misinformed analysts to see the real picture. If you want to see why and how we were able to predict the future accurately, you can read those previous articles to see our reasoning and what we measured.

Of course, if you do not have time to check the repo markets, commodity prices and gold/copper ratio, then you can simply trust the people who do. (Oh, did I say “trust”? I meant “verify” Please click on the links above to see timestamped articles and irrefutable evidence that we knew about the economic conditions ahead of time. You should only trust what you can independently verify.)

Check the rear-view but focus on the road ahead

We know that 2022 was called the “annus horribilis” by many in the financial industry. Yes, Bitcoin, Ethereum and other cryptocurrencies dropped by two-thirds, but the market downturn also slashed many stocks.

Stock in household names such as Tesla, Amazon, Facebook, Paypal and Netflix all dropped by over 60% in 2022. Even the decades-old stalwarts Apple and Microsoft were down between 25-30% for the year.

We are only just starting 2023, and whilst the new year is still fresh, this Rabbit year seems to be a totally different beast from its Tiger predecessor. Inflation is high, but seems to be coming down, interest rate rises are increasing but at a regular and predictable pace, and both consumer and business sentiment seems to be significantly better.

Before moving further, we should always check what is behind us, and hopefully learn a few lessons from what occurred. Only then can we go confidently forward. We look forward to a favourable and profitable 2023, whilst retaining the wisdom accrued from 2022 and earlier.

Quick technical insight

We shared the above chart on social media earlier in the week, along with a two-minute video. Click here if you would like to see the video, or just refer to the main points of the chart. Basically, we are looking at the inclination for Bitcoin holders to sell, versus the BTC price. In the last ten years, when BTC holders were holding on tight, the BTC price shot up dramatically. As of a couple of days ago, the inclination to sell Bitcoin is at the lowest level it has ever been in a decade. That fact alone would seem to indicate we could be in for a parabolic move in price this year.

 

How did we go this month?

Whilst most of the larger coins were down by 50-60% for the year, our investment in LivePeer is up 121% for the year and our QUANT tokens are up 145%. This indicates the benefits of diversification, and that not all cryptocurrencies are the same.

The flagship balanced Bostoncoin fund enters its eighth year with a nice gain of 33.37% over last month. We look forward to what may be the next big crypto bull run in 2023 and 2024. Selling pressures are now at record lows and institutional buying is increasing. These factors could help to create large price increases, as well as price stability.

Jan 31 2023n BOS NAV 59.1327924n BOS Price 65.0460716

The more aggressive DARTcoin fund is only getting into its third year, and is up 50.83% over last month. As with any higher-return fund, DART also carries higher risk, so should be used as a small part of an overall portfolio.

Jan 31 2023

DART NAV 106.153665nDART Price 116.769031

Take care out there. Tell your friends to shun the scams and embrace the puppy pack. Education and information are always free at BostonTrading.co and Cryllionaire.com.

See you next month

JB